Liquidators and Their Responsibilities
Upon dissolution of an enterprise in accordance with the contract, articles of association or due to other reasons, a liquidation committee should be formed within 15 days. In general, the liquidation committee should consist of directors of the enterprise and representatives of the creditors. Chinese CPAs or lawyers may also be hired to sit on the committee. If deemed necessary, the competent financial authority may send its staff to supervise the work of the committee. If the enterprise declares bankrupt , the case should be filed with the people's court for bankruptcy proceedings.
After the liquidation committee announces the liquidation of the enterprise, it will inform the creditors who will declare the outstanding debts owed to them within a specified period. The committee will then draw up a liquidation plan, prepare balance sheets and other financial statements, assets lists, debts and liabilities lists, and give its opinions to the board of directors, the liquidation plan will be filed with the competent financial and administrative authorities for the record and implementation.